March 7 (Reuters) - Shares of Hewlett Packard Enterprise ( HPE )

slumped 20% in premarket trading on Friday, after the

AI-server maker said its annual profit forecast would be hit by

U.S. tariffs in an intensely competitive market.

U.S. President Donald Trump imposed 25% tariffs on imports

from Canada and Mexico, but exempted some goods from both the

countries under a North American trade pact until April 2. His

additional 10% duty on Chinese goods - on top of the 10% tariff

he levied on February 4 - took effect on Tuesday.

HPE's comments show that tariffs, though only implemented

this week, are already affecting U.S. corporations. Analysts

have said the uncertainties surrounding the escalating trade war

could cause prices to rise across exposed sectors, including

technology and autos.

"Recent tariff announcements have created uncertainty for

our industry, primarily affecting our server business," CFO

Marie Myers said on a post-earnings call on Thursday. "We are

working on plans to mitigate these impacts through supply chain

measures and pricing actions."

The company also said it would cut jobs to trim costs, at a

time it faces intense competition from rivals Dell and

Super Micro Computer ( SMCI ) amid rising demand for AI servers.

"Our impression is that these are temporary issues. After

updating our forecasts, we expect a rough second and third

quarter, but a recovery in the fourth quarter," Morningstar

analyst Eric Compton said in a note.

The companies that sell AI-optimized servers are grappling

with margin pressures due to their costly production and rapid

transition to the demand for more powerful chips.

"In AI, our margins were affected by the transition to new

GPUs and managing older GPU inventory," Myers said.

HPE currently trades at 8.19 times the estimates of its

earnings for the next 12 months, compared with 9.74 times for

Dell and 10.71 times for Super Micro Computer ( SMCI ).

The company was set to lose more than $4 billion in market

value, if premarket losses hold.